SEC obtains judgments against promoters of CoinDeal scheme
On February 7, 2024, the Illinois Northern District Court entered final judgments on all claims against two CoinDeal promoters, Arline Woodbury of Ridgewood, New Jersey and Joyce Holverson of River Forest, Illinois.
The SEC’s complaint alleged that Woodbury and Holverson acted as downstream promoters for the CoinDeal scheme, through which investors would supposedly generate astronomical returns from the imminent sale of an anonymous blockchain technology.
According to the complaint, Woodbury and Holverson formed their own investor groups to take advantage of bonuses and payouts offered through CoinDeal. The complaint alleged that Woodbury and Holverson raised more than $3 million from hundreds of investors based on dissemination of materially false and misleading statements about the deal and collectively misappropriated hundreds of thousands of dollars of investor funds for personal use.
According to the complaint, no sale of CoinDeal ever occurred and investors received no distributions.
Woodbury did not answer or otherwise respond to the SEC’s complaint. In an order entering default judgment, the Court found that Woodbury violated the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and aided and abetted violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by the alleged orchestrator of the scheme, Neil Chandran. In addition, the Court: (i) permanently enjoined Woodbury from future violations; (ii) entered an officer-and-director bar against Woodbury; and (iii) ordered Woodbury to pay disgorgement of $199,151 plus prejudgment interest of $47,991 and a $230,464 civil penalty.
Without admitting or denying the SEC’s allegations, Holverson consented to the entry of a final judgment permanently enjoining her from violating the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act Rule 10b-5 thereunder. Holverson also consented to the entry of an officer-and-director bar and to pay disgorgement of $164,308 plus prejudgment interest of $25,778 and a $175,000 civil penalty.